tv Worldwide Exchange CNBC February 18, 2016 5:00am-6:01am EST
good morning and good-bye correction. u.s. stocks now in a three-day rally, but can the bulls make it four days in a row? >> oil shock, crude prices climbing again right now as iran backs an output gap. >> and decision 2016. a new nbc news, "wall street journal" poll out this morning, and it shows donald trump dropping to second in the national gop race. it's thursday, february 18th, 2016. "worldwide exchange" begins right now. good morning. welcome to "worldwide exchange" on cnbc. it's throwback thursday. you can tell by the music. i'm sara eisen.
>> and i'm dominic chu sitting in for wilfred frost this morning. u.s. stocks are on their strongest three-day rally since the turmoil in august. the dow and the s&p up more than 5%, the nasdaq gaining around 6.5%. this is the first time since october of 2011 that the s&p 500 has rallied at least 1% in three straight sessions. u.s. equity futures right now pointing to what could be perhaps a little bit more of a modest pause we'll call it. >> it's early. >> we're not really moving anywhere. the s&p, dow, and nasdaq relatively flat as we approach this morning's session. so again, sara, an interesting move overall. three-day rally. taking a bit of a pause for right now. oil, of course, still a big story. >> we got to watch oil prices very closely this morning. they've been part of the story of strong stocks in the last few days. wti crude well above $31 a barrel. brent, the international bench mark, up almost 1.5% at $35 a
barrel. wti, which trades here over the last three days, is up 17%. yes, it's got a long way to go to really climb back and make back some of those losses, but it's been a strong few days here. 5.5% up yesterday. partly due to this latest development where iran did say it would support joint efforts by top oil producers to stabilize prices. it stopped short of actually committing to an output curb or an output cap. but it did say it would come to the table. that was largely regarded as a symbolic step. things are happening. >> again, it's all about that journey of a thousand miles. it has to start somewhere. maybe with all the jawboning and saber rattling, someone will do something. >> but in general, don't you feel when it comes to u.s. stocks, as they have turned around earn a gone up, some of those tight correlations, whether it's oil, junk bonds, china, have started to break down a little. we don't have a big sample yet. >> correct. >> but we are seeing strength in the u.s. economic data and in the u.s. stocks that have been
beaten badly. the consumer discretionary, financials. >> that's what makes people feel better about what's happening right now. the idea that not everything has to go up or down together. the idea that as you see fundamentals individually take hold, that's a good sign. it means traders are looking at what really matters to individual markets. so let's check on if that playing out in the global stock market this morning. new economic data out of china overnight. chinese consumer inflation picking up to 1.8% year over year, falling short of market expectations. the producer price index fell by 5.3% in january. meanwhile in japan, exports fell by 12.9% at an annual rate. that's worse than some analysts' expectations. imports there down about 18% last month. if you take a look at stocks in asia as they closed, mixed picture. japan and the hang seng are stronger in the day by north of 2%.
the shanghai composite and shenzhen composite fractionally lower. in early european trading, we're seeing a bit of momentum come out of the market there. the dax still up by half a percent. it was up more than that earlier on. the cac in france up by about a quarter of a percent. the ftse 100 down by half a percent. the ftse mib in italy and spain ibex up. >> let's show you what's happening in the broader markets outside of equities. the ten-year treasury note, you've seen less demand for these safe haven assets on a more upbeat tone in global markets and stocks. the u.s. ten-year treasury yield went above 180. they're pretty much flat this morning. we have a bunch of economic data we'll tell you about in a moment. we'll be watching the treasury trade. as for the dollar, it's sort of been flattish. it started to firm up in yesterday's session along with rising stocks. we're not quite reversing. there's not a lot of action. >> it's not a strong tone yet.
>> equities are holding their gains. the dollar-yen is trading at 113.83. we'll keep an eye on that through the morning. as far as gold, which had been climbing all year long, it's coming off a bit here. down almost five bucks, 0.4%, still holding above that critical technical level of $1200 an ounce. >> so gold obviously a big focus here. let's take a look at what's happening. moody's out with its latest global macro outlook report. the firm suggests downside risks to global growth have spiked in recent months, and the new report predicts ongoing market volatility could further exacerbate economic weakness as well. moody's, perhaps not a great read. >> a little late, as usual, with the rating agency. a lot of global central bank chatter to get to today as well. remember, this is a global central banker's world. bank of japan governor calling for coordinated action from the g-20. he's arguing that the united states, china, and the eurozone,
as well as japan, should work together to mitigate the negative impact of volatile financial markets on the global economy. they meet starting next friday. unclear what that coordinated action should do. he didn't go into it, didn't have any specific policy prescriptions. you wonder, does he want a coordinated currency intervention? japan hasn't intervened since 2011. it would be highly unusual. now that things have firmed up here in the last few days, i wonder if the urgency will be there. >> absolutely right. >> other macro news, venezuela's president devaluing the country's currency again. the country is fighting a major economic crisis and plunging oil prices. venezuela has been painful for a lot of american multinational companies that do business there. i follow a lot of the consumer companies. any chunk of business they have there just becomes worth so much less every time the government
abruptly devalues, but they're struggling. >> and the inflation story is obviously a big focus. you never know what's going to happen. >> there's another big story in the currency world in the central bank world. that would be mexico. the peso surging yesterday after the country's central bank surprised the markets and actually raised interest rates. it has a new intervention policy. they followed the federal reserve. there's the dollar versus the mexico peso. pretty much all year last year you can see it climb. the mexican peso hit a record low. now a bit of a boost. >> the number of banks out there that could really diverge in terms of policies is coming to fruition. now, retail earnings on the company side of things a big focus. a trio of economic reports top today's agenda. also, weekly jobless claims are out at 8:30 a.m. eastern time. first-time filings for unemployment expected to rise slightly from the previous week. the monthly philly fed survey,
which tracks regional conditions, also out at 8:30 a.m. eastern time. that's followed up at 10:00 a.m. by january leading economic indicators. also, san francisco fed president john williams is speaking this afternoon as well. walmart reports fourth quarter results before today's opening bell along with discovery communications and starwood hotels. after the closing bell, we'll get the likes of more upscale retailer nordstrom. >> this is going to be an interesting week with retailers reporting. walmart the biggest. shares up almost 9% in the past three months. landon dowdy joins with us three things to watch this morning. >> hey there. good morning. is it the beginning of a new leg higher in the stock? the street is looking for earnings of $1.43 a share on revenue of about $131 billion, which would be the first decline in sales in the past 25 years. beyond the numbers, these are the three things to watch when the company reports before the bell. first, traffic. other retailers have warned that
q-4 was tough because of competition. so let's see if the low-end consumers were out shopping. second, wage hikes could have put a dent in profits. if sales don't move in the right direction, the pressure of higher wages could result in down beat guidance. the third thing to watch, store closings. the retail giant will close more than 250 locations as it shifts focus towards super centers instead of smaller stores. one retail. analyst telling me it isn't enough and the company needs to close more stores here and overseas as well. back over to you. >> all right, landon. thank you very much. also interesting to note, separately, walmart announcing efforts to improve scheduling for its workers in the u.s. it's hoping to retain and motivate employees by offering now fixed shifts. this as the retailer has been criticized for giving workers little notice before scheduling hours. it has increased wa ed wages. >> i was going to say, the increased wages is huge. how they treat their employees, a huge focus not just for walmart but so many people in america. the largest private employer in the united states.
>> there you go. starts with the workers. >> absolutely. >> this has been a whole turnaround. the ceo already warned it's going to be slow and that sales growth this year is going to be flat, up 3%. >> it was a huge laggard for the dow last year. there's hope for a lot of investors it could try to turn things around. >> it was the worst performer on the dow. >> one of the worst. it might have been the worst. >> i think it was the worst. nike on top. tale of two retailers. >> other stocks to watch today, invidia posted stronger than expected sales. games and pcs helping there. a unit of china's privately held hna group is buying the distributor ingram micro in a $6 billion deal. boeing's engineering union approving a six-year contract. the deal pretty much guarantees
an average 5% annual wage increase for five years overall. boeing shares right now fractionally lower in extended hours trading. >> been hit hard lately. in other corporate news, shares of newmont mining. lower metals prices and delayed exports weighed on those results. marriott falling after reporting mixed quarterly results. the hotel chain seeing a revenue increase, but not as much as expected. similar story for sun power. earnings and sales topping estimates, but that guidance for the first quarter in the year coming in below forecast. >> those shares up by about 3%. coming up here on "worldwide exchange," apple pay goes live in china. a live report from beijing next. plus, google's ceo throws his support behind apple in its encryption fight with the united states government. we'll bring you his comments straight ahead. >> plus, as you can hear, it is throwback thursday. we're throwing it back with some old-school rap music this morning. tell us what music you want to
hear. we'll take your requests. add to our collaborative play list on spotify. you can get the link by liking us on facebook or following us on twitter. we have a great twitter question coming your way on politics with tracie potts in a moment. stay tuned. you're watching cnbc, first in business worldwide. cathy's gotten used to the smell of lingering garbage... ...in her kitchen yup, she's gone noseblind. she thinks it smells fine, but her guests smell this. ding, flies, meow febreze air effects heavy duty has up to... ...two times the odor-eliminating power to...
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♪ no, you're not ♪ yogonna watch it! ♪tch it! ♪ ♪ we can't let you download on the goooooo! ♪ ♪ you'll just have to miss it! ♪ yeah, you'll just have to miss it! ♪ ♪ we can't let you download... uh, no thanks. i have x1 from xfinity so... don't fall for directv. xfinity lets you download your shows from anywhere. i used to like that song. welcome back to "worldwide exchange." if you're just waking up or driving on your way to work, let's get you up to speed on what's happening with the markets. asia first. as you can see, generally green
behind me with one glaring exception, china and hong kong in the back over here. overall, the nikkei up by about 2.25%. the hang seng up by about 2.3%. the shanghai composite down fractionally. the shenzhen also down as well. the mainland china indices lower here. hong kong, japan the two other major ones in that region moving to the upside. in early european trading, let's get you up to speed there as well. the german dax up by about 0.75%. the cac in france up about half a percent. the u.k. ftse 100 down by about one half of 1%. all of that carrying into the picture with u.s. futures. showing a bit of a breather after a three-day rally. nasdaq futures up fractionally. s&p futures up by just a single point. dow futures up by about 19. so again, the market trying to build here in the u.s. on a three-day rally. we'll see if it happens. right now the futures indicating what could be a very flat open.
>> a fast one. almost erasing all of february's losses. dom, thanks. making headlines this morning, spanish police arresting five directors after a raid of chinese bank icbc's madrid office. the investigation involves allegations of money laundering. and speaking of china, apple pay launching in that country today. we go live to beijing with that story. good morning. good evening, i should say. >> good morning, sara. apple jumps into a very competitive landscape today. 358 million people, that's the entire size of the united states, all make payments using their mobile phones. the dominant players in this market are we chat and alibaba's ali pay. apple says apple pay has some strong selling points. first of all, they say the technology they're using is much more secure, so people get more privacy. also, they say that the iphone and apple pay service is just
easier to use. you just take your iphone and tap it on one of the millions of terminals that are run by their partner here. it's a state-run union pay. and then you're done. this is what some customers have said. >> translator: the apple pay system is very fast and convenience. all you need to do is scan your fingerprint without having to open up another app. >> translator: apple pay is directly linked to your credit card. i think it is more secure because it cooperates with union pay. >> apple, though, does face a very uphill battle because its rivals here, alibaba and ten cent, really understand this market very well. they have a lot of services that apple pay currently doesn't have, such as the ability to transfer money, or you can even trade stocks or pay for your utility bills. also, they offer a lot of discounts and coupons. that's a big question mark here. people are wondering if apple is going to jump in.
however, so far, there are a lot of apple fans here because of the iconic status. people have been talking on social media about how they're excited to try out the new service. in fact, in the first hour after the launch, chinese media said over 100,000 people linked their bank cards to apple pay. guys? >> just curious, here in the u.s., mobile payments aren't exactly widespread. it's not mainstream. i rarely see people pulling out their phones and actually paying that way. is it different in china? >> it's very different in china. everybody uses it. like i said, in terms of the scale, it's 358 million people, huge numbers of people just going out and using their mobile phones. it really is just part and parcel of every day life. you see people using it for taxi services, for driving services, uber. they use it for just going into the shop. they use some combination of we chat and ali pay. now, at least some of the people
who are more excited about apple, are going to probably be using their iphones and apple pay as well. >> you're way ahead of us. thank you very much. reporting from beijing. do you use mobile payment? >> i try to when i can. what i found anecdotally is that there aren't a lot of places where i can actually use it. the only place i've been able to consistently use apple pay has been a whole foods market. so interesting. >> i've seen it in the taxis and starbucks a little bit. >> well, coming up here, we're going to turn to politics. ted cruz is topping donald trump in a new national poll. the story from the presidential campaign trail is coming up next. and that brings us to our twitter question of the day. should investors actually fear the political risk around the u.s. election? we want to hear from you. take our poll on facebook or on twitter. >> yeah, @cnbcwex. first, here's today's weather forecast from the weather
channel. >> let's take a look at the forecast for today. relatively quiet for much of the eastern seaboard, including new york and atlanta. plenty of sunshine. back out west, take a look at what you've got. in the valleys, mainly rainfall. in the higher elevations, all snow. looks nice in the central rockies and back into california in the sierras. in terms of temperatures, take a look at what we have for the central plains, the southern plains. if this ridge had a name, it would be tony danza because this is the boss. 76 degrees your high in dallas. going into the 70s in the front range. 44 degrees in bismarck. somewhat chilly back out to the pacific northwest. new york with a high of 34. atlanta with 60. chicago with 41. more coming up on the other side of this commercial break. you're watching cnbc. friends coming over? yeah, so? it stinks in here. you've got to wash this whole room are you kidding? wash it? let's wash it with febreze. for all the things you can't wash, use... ...febreze fabric refresher whoa hey mrs. webber inhales hey, it smells nice in here
welcome back to "worldwide exchange." now to political news as south carolina prepares for saturday's gop presidential primary. a new national poll suggests a potentially seismic shake-up in the republican race. ted cruz is hoping to keep up with donald trump in this weekend's critical contest. but marco rubio has just scored an influential endorsement. tracie potts reports live from washington, d.c., this morning. tracie, interesting developments for sure. break it all down for us. >> well, first of all, dominic, we're going to show you who that influential endorsement is for marco rubio. in terms of the race at the top between donald trump and ted cruz, one poll, our poll, now shows that there's a new front
runner in the republican side of this race. >> the sound you're hearing is the sound of screams coming from washington, d.c. >> reporter: that's ted cruz announcing his two-point lead over donald trump in our new nbc "wall street journal" poll. >> i think somebody at "wall street journal" doesn't like me. >> reporter: statistically, it's a tie, but trump is down seven and cruz is up eight points just two days before south carolina's primary. >> republican voters are taking one more mote to take a pause and decide whether donald trump is really the person they want to nominate for president or not. >> reporter: now trump is threat an lawsuit over this cruz ad. >> i'm very pro choice. >> reporter: trump says that's olt, he's now pro life. >> it is quite literally the most ridiculous theory i've ever heard. please, donald, file this lawsuit. >> reporter: at that same event, marco rubio denounced president obama's trip to cuba. >> he's probably not going to invite me. >> reporter: rubio just picked up the endorsement of south carolina's governor over jeb
bush. >> i'm disappointed she didn't endorse me. >> reporter: well, two more days for these candidates to either be disappointed or to gain some momentum with only six republicans left. dominic? >> it's interesting. can you break it down in this way, this nbc "wall street journal" poll shows that, yes, we have a new front runner in terms of ted cruz, but other polls in south carolina still show that donald trump has a solid lead here. so how exactly does that divergence play out in the coming weeks? >> reporter: exactly, dominic. that's a national poll versus the south carolina polls that we're looking at, which could be very different. and to put it in context, it is one poll now that after months and months of donald trump being the front runner shows a slight shift. it shows the momentum upward for cruz. it shows downward momentum for donald trump. essentially, we had two points. it's a tie. it's not a complete game changer. it does show that there may be the beginnings of a new thought
process by some republicans. this is what the pollsters are trying to figure out. is this temporary based on maybe trump's debate performance last weekend, or is it conservative republicans now starting to think, is this the guy for us? it's going to take more time and more polls to determine that. >> we'll be watching very closely. tracie potts, thank you so much. >> in other washington news today, president obama is going to cuba. a senior administration official confirming the white house will announce today that the president will be traveling to latin america next month, and that includes cuba. cuban leader raul castro and president obama seen here together last year in new york announced back in 2014 that the two countries would begin to normalize relations after 50 years without diplomatic ties. the last sitting president to visit cuba, dom, calvin coolidg coolidge. republican criticisms are coming in, especially from ted cruz and marco rubio, both sons of cuban
immigrants, saying the president should not go there with this leader in power. >> it's pretty amazing. 1928, calvin coolidge, the last time a sitting u.s. president was in cuba. very big development. in sports business news today, nike is dropping manny pacquiao in the wake of disparaging comments the boxer made about gay people on monday. the filipino boxer was quoted as saying, gays, quote/unquote, are worse than animals. nike calls his comments abhorrent and says it strongly opposes discrimination of any kind. pacquiao did apoll jaz on wednesday. he was reportedly making about a million dollars a year from his endorsements with nike. >> he sort of apologized. it was a sort of half apology a lot of people didn't take seriously. he still said he opposed gay marriage for religious purposes. >> we'll see how that plays out. in other sports news, duke and north carolina. one of the biggest rivalries in all of sports. the schools faced off again on the basketball court.
coach k and the blue devils traveling the eight miles down tobacco road to take on the tarheels. it would turn out to be another classic. with duke up by one with seconds to go, carolina goes for the winning shot, and it's blocked. duke upsets the number three ranked north carolina tarheels 74-73. >> meantime, espn is reportedly in talks to get its network on digital streaming services. recode saying this would be similar to its current deal with dish. dish network's skinny bundle, which is actually called sling. espn president john skipper spoke about it with our own julia boorstin. >> we are certainly interested in pursuing opportunities and have already. we sold the world cup of cricket last year over the top. we generate a hundred thousand subscriptions at $1,000 apiece. we know how to do it.
we'll continue to look for other opportunities for content that does not currently exist. >> skipper says any online offerings would have to include other disney owned channels or properties. >> interesting. ott, over the top, still getting a lot of attention. now, this is a bond auction that's going to attract a lot of attention from investors. yes, it's a different kind. christie's is selling several items from the latest james bond movie tonighten in london. that includes the special edition aston martin that 007 drove in the film. hopefully still intact. the car features a plaque designed by daniel craig himself. the auction is celebrating the release of "spectre" on blu-ray and dvd this week. all profits will go to doctors without borders and other charitable organizations. i'm a big bond fan. >> when we come back, this morning's top stories. plus, delta airlines wants to
get an advantage. so it's turning to food with a little assistance from celebrity chef danny meyers. you can't predict the market. but through good times and bad... ...at t. rowe price... ...we've helped our investors stay confident for over 75 years. call us or your advisor. t. rowe price. invest with confidence. you can fly across welcome town in minutes16, or across the globe in under an hour. whole communities are living on mars and solar satellites provide earth with unlimited clean power. in less than a century, boeing took the world from seaplanes to space planes, across the universe and beyond.
♪ no, you're not ♪ yogonna watch it! ♪tch it! ♪ ♪ we can't let you download on the goooooo! ♪ ♪ you'll just have to miss it! ♪ yeah, you'll just have to miss it! ♪ ♪ we can't let you download... uh, no thanks. i have x1 from xfinity so... don't fall for directv. xfinity lets you download your shows from anywhere. i used to like that song. good morning. a warning from one of the world's most powerful investors. why ray dalio expects lower returns and higher risk. >> on a roll, the s&p 500 rallying at least 1% for three straight days now. it is it's best such winning streak in more than four years.
>> and a hungry heart. delta airlines teaming up with famed restaurateur danny meyer in a bid to win premium travelers. it's thursday, february 18th, 2016, and you're watching "worldwide exchange" on cnbc. good morning. welcome to "worldwide exchange" on cnbc. it's throwback thursday, music edition. i'm sara eisen with dominic chu. >> i love the music. >> old-school rap. >> u.s. equity futures building o on their gains for the last three days. they've been improving in the last half hour. dow futures pointing to a start 32 points higher. we're coming off our best three-day winning stretch since august. the gains are coming almost as fast as the losses came in the
earlier part of the month. let's show you the earlier trading action in europe, where it also is green on the screen mostly. the german dax now up a full percent. in france, up about half a percent. european leaders are meeting today. that brexit vote is on the agenda. they're certainly going to talk about it and how to handle that in the u.k. and in the eu going forward. mixed picture over in asia overnight. japan's nikkei index did manage to close higher by more than 2% on the back of a weaker japanese yen, though we did see losses in china. fractional losses compared to what we've seen earlier this year. shanghai closing down about 0.3%. a big part of the story of the strength in equities is the picture in oil. which is gaining again today. brent, the international benchmark, almost 2% higher. on this idea that major oil
producers opec and non-opec, are finally talking, coming to the table, acknowledging these low prices are a problem and maybe going to do something about it. >> it wasn't that long ago, maybe just weeks, that investors, many of them, saying that the idea of a market that's stable was contingent on oil becoming more stable. you're seeing a bit of that now. again, the volatility has been there to the downside and upside. we'll see if it evens out here. >> the other point i wanted to mention, your three things to watch yesterday, volumes. we saw 14% higher volumes than the last three-month average yesterday. >> people are getting into it. maybe they're buying into it. >> a lot of the losers, the retailers, financials, and energy companies, have been leading us higher. >> speaking of those retailers, it's part of today's agenda. retail earnings a part of it. also a trio of economic reports. weekly jobless claims, the monthly philly fed survey all
out, as well as san francisco fed president john williams speaking this afternoon. walmart a key here. walmart reports fourth quarter results before today's opening bell alongside discovery communications and starwood hotels. very consumer oriented if you look at it in that way. after the close, more consumer oriented names in terms of jw nordstrom earnings. >> retail all through the next week. among the other corporate stories, apple launching its mobile payment system in china today. the company is trying to convince hundreds of millions of users of the country's entrenched dominant pay services to switch over to its over offering. in other tech news, apple ceo tim cook getting support from goog until its fight with the fbi over encryption. google ceo is warning of the dangerous precedent that could be set if apple is forced to create software to help authorities crack a terror suspect's phone. this story is all over the place. it's made its way into mainstream. it's on the cover of "the new
york times" today. we'll talk about it in a moment. yahoo! holding its mobile developers conference in san francisco today. a number of headlines on the company this morning. and a new report citing confidential internal data suggesting the number of people visiting yahoo! mail, the yahoo.com home page, and yahoo! search all declining. so many of these magazine properties from yahoo! are shutting down. yahoo! finance still alive. >> absolutely. and cnbc a part of that whole picture. other stocks to watch today as well here, check out what's happening with jack in the box. reporting lower than expected profits as fewer customers dined at its restaurants. shares of godaddy sinking as well, the hosting company blaming the strong dollar for its sales miss. it also gave a conservative first quarter outlook.
and williams companies missing estimates on both the top and bottom lines. the first posting a big writedown related to, what else, low commodity prices. those shares up by about 2% in the extended hours trade. >> some other names to watch, a strong swiss franc weighing on nestle's results. its slowest sales increase in six years. also blaming emerging markets. netapp cutting 12% of its work force as the profit outlook missed consensus. and more pain in the oil patch. marathon oil slashing its 2016 spending by 50% and reporting a quarterly loss. >> shares are still up, though, 4%. >> cost cuts. >> absolutely. toyota is recalling more than 1 million small suvs in the united states. the company says it's possible seat belts in the second row could fail in a crash. the recall affected the rav 4 models from 2016 through 2012 model years and the rav 4
electric vehicle from 2012 through 2014. toyota shares closing higher today in japanese trading, up by about 1.75%. >> we've got a few good stories here for this morning's trending stories, starting with delta airlines teaming up with danny meyer's union square hospitality group to gain an edge in its premium class food menu. delta will now serve new menus on flights from jfk. the aim is to make airplane food, quote, just as good as it is at restaurants. >> a real reversal. airlines used to serve food. now they don't. now they're going premium. >> but this is just first class. >> they already got free food to begin with. >> maybe it'll lift the quality of all airline food, we can hope. >> amazon is expanding its on-demand delivery service to handle standard packages and speed up dluelivery times. plans have not been announced publicly, but the company outlined details in an e-mail to contract drivers.
they're looking to create logistics networks to compete with the giants of u.p.s. and fedex. it's just amazing. amazon can get into everything. now it wants to do deliveries. >> well, it spends more than $10 billion per year on these costs. they're adding up. trying to cut it off. chip maker advanced microdevices and the associated press are blending virtual reality and journalism. the two companies are working together to make media that can actually be viewed from headsets like the oculus rift. >> it's pretty amazing how quickly virtual reality has taken off. we saw the oculus rift get its price tag, preorders are there. now everybody is making content. if you wanted to know if there was buy in to vr, that's where it is. >> can you imagine what that does for news in conflict situations, covering wars, covering crises. >> paradigm changes. >> it's like you're there. you can be there. >> and kanye west trending yet again. the rapper missed out on an
estimated $10 million in sales because of pirated down loads. his new album was illegally downloaded more than half a million times in just the first 24 hours of the release, making it the most ripped off album by far on file sharing sites. again, kanye west -- >> his plan sort of backfired here. he wanted to make it all exclusive. >> only on tidal. >> which is jay-z's service. actually, a lot of people thought it was going to help jay-z's service, which it still might. it's the number one downloaded app on the apple store right now. a lot of people are ripping it off. >> well, coming up, today's must reads, including a warning from hedge fund titan ray dalio. stay tuned. you're watching "worldwide exchange" on cnbc, first in business worldwide. hey dad. hey sweetie, how was your first week? long. it'll get better.
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now to today's must reads, stories catching our attention. cnbc obtained a letter the hedge fund manager ray dalio wrote to investors. he's expecting higher returns and lower risk. he write the fed's ability to stimulate by lowering interest rates through quantitative easing is weaker than it's ever been and says the bank of japan and european central bank's abilities are even weaker. this is interesting only because the man, yes, does manage a lot of money, about $150 billion worth, but also, and this is
from the letter as well. i thought you'd get a kick out of this. it's interesting. he says that to avoid economic volatility, currency movements must be larger, he wrote. this is ray dalio. that reality creates currency wars, pegged exchange rate breakups, and increased currency risk for investors. so ray dalio says lower returns are the norm, higher risk is going to be the norm going forward, and a lot of that is going to manifest itself in the currency markets. >> there's already a lot of action. he expects bigger moves. >> because there's not that much more you can do. >> he's gone out a few times defending this call that the fed will ease before it tightens. he said it to us at davos, to the "squawk box" team. he wrote about it in "ft." >> if you want to read more about it, it's the top story on cnbc.com right now. you'll get a rot molot more det. >> absolutely. good one. my pick today is in the "usa today." it's an op-ed by north carolina republican senator richard burr, who is also, by the way, the
chairman of the senate select committee on intelligence. he has a stake in this whole apple controversy. he says that apple should not be above the law. he also, as i just mentioned, is on the senate panel that sort of deals with this. he argues here that apple has been helped by u.s. laws. this follows the fight with tim cook with the fbi after the tech firm was ordered to unlock the iphone of the san bernardino gunman. it exploded all over the place yesterday. the privacy battle gone public. he says, quote, apple exists as a corporate entity with the protections provided by u.s. laws, but it can't be allowed to pick and choose when to abide by those laws as it sees fit. and all the politicians are weighing in on this. donald trump was asked about it yesterday in the msnbc town hall. he says, of course, apple should unlock the phone. apple, and silicon valley, who's backing him, it's not an easy issue. they say they'd have to totally create a new feature to do this, which would compromise the privacy and security of so many
other apple users and also make it vulnerable to hacking. >> it's also very hard to peg this to party lines. you'll find republicans both arguing for and against this and democrats doing the same thing as well. so the whole idea of privacy, constitutional protections, whether or not you should do this kind of thing, that's all key to the argument. >> absolutely. all right. we're coming up on the top of the hour, which means the "squawk box" crew is coming up. kayla is filling in. i know you're probably going to talk more about this apple thing. it's on the cover of "the new york times" today and continues to heat up and move into politics and the mainstream. >> it's been a broad issue across the aisle. it's gotten a lot of chatter on the campaign trail. we're going to have ben white from politico here. no doubt that's going to come up in our conversation with him. you guys have been watching the markets. slightly firmer, although i don't want to jinx it by acknowledging that they have been higher. they did see that three-day rally for the first time this year yesterday. but the big news for us this morning, sara and dom, is going
to be when walmart reports earnings. we know the company has announced they will be embarking on this multibillion dollar charge to invest in wages, if tra -- in training. the stock is up about 8% so far this year compared with the s&p being down. but it bottomed in november. it's down 26% over the last year. investors are sort of sitting on the sideline to see exactly what walmart will report for its fourth quarter, which is what it will announce today. that's going to really determine what the tone of the company is, whether they're feeling optimistic about the economy, about the tax refund season, about a lot of these macro and micro headwinds coming their way. they've been closing stores, restructuring the company. it will be seen in just a couple hours how the company expects all of those investments to pay off. make sure and keep it here on cnbc. >> kayla, how did you feel about unc and duke last night? >> well, last night i didn't really feel anything because luckily i went to bed before the
game was over. this morning when i woke up and saw the headline, i was heartbroken, especially for all of those kids at chapel hill and the dean dome, which seats about 21,000 people, mostly students. people kill to get one of those tickets. to be there at a home game and to lose by one is just absolutely heartbreaking. but we'll face them again in about a month. we'll get them back. >> we feel for you. tune into "squawk box" coming up after "worldwide exchange." up next, stocks in rally mode, up three days in a row. more economic data out today as well. the deputy chief u.s. economist at ubs will join us next with his take. "worldwide exchange" will be back after the break. hey, jesse. who are you? i'm vern, the orange money retirement rabbit from voya. orange money represents the money you put away for retirement. over time, your money could multiply. hello, all of you. get organized at voya.com.
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good news we're seeing? is that what's helping to drive market sentiment these days? >> well, it's not driving market sentiment, which i think is pretty obvious. but you can believe it. for me, the thing is, you want to look at the simplest data. the data that's the least manipulated, least adjusted. i don't use manipulated in a negative term. if you want to be an economist on wall street, here's a tip for all the kids out there. if claims aren't going up, nothing bad is happening. >> we'll get that number today. >> that's simple. >> it's been good. >> and that's it. that's the key to my forecasting right now. if claims don't go up, nothing bad is happening. if something bad happens, someone is going to get fired. >> and it's high frequency. >> every week it comes out. we're already seeing that claims have gone up in areas related to energy. states that have being energy components have seen claims go up. we know that's bleeding through into the data. nowhere else is showing any sort of life in claims. people aren't being laid off
anywhere else. it tells you claims would be at even lower levels. if they're at that low level, no one is being fired, then therefore nothing is wrong. >> i'm a little surprised to hear you say that it's not helping sentiment at all. there was this narrative that went through in the selloff over the past few weeks that the u.s. was heading into recession and the markets were sniffing it out. that is not being backed up by the economic data. >> no, but i mean, markets don't seem willing to believe it. markets are focused on gdp, and they're focused on some of the bigger production things. for me, i look at bank loans. i look at claims. i look at the ism surveys. they're simple, they're easy. people have been doing them since the 1940s. they have a long history. it doesn't require a ph.d. to put the numbers together. it doesn't require a ph.d. to interpret the numbers. might be telling you that the age of the ph.d. is over and it's time for simpler is better, simpler is best. >> as we talk about this idea
that simpler is better, simplest is best, if you had to put this idea of a possible negative economic outlook on the table, what would have to happen for you to change your mind and say, besides the fact that jobless claims are going to happens have to take a downturn, what other kind of data would hayou have t see in order to believe the u.s. economy or the global economy as a whole is heading lower and lower? >> i'd need to see the u.s. consumer roll over. the consumer has always been the lynch pin of the u.s. economy. if consumers have jobs and they're even seeing marginal wage gains, which is basically the right way of putting what the wage gains have been, then consumption will hold up. if consumption holds up, we're fine. half of u.s. gdp is spending on services. it's always reasons why you wake up and you're like, what happened to my paycheck? i just spent it and i don't know on what. you spent it on services. services are half of growth. they're very stable. it's basically the u.s. economy on autopilot.
>> though, they have trended lower, which was very disappointing. yes, they're still expanding, but the last report did show a little weakness. >> on a year over year basis, it's running a little light. but it's not to be that worried about. when you start with the idea that half of that number is basically just growth, right. so when you do a gdp calculation and you're starting with a big net positive and you have to shade it up or down from there. so for me, that's what i would worry about. worry about the u.s. consumer and in particular the u.s. consumer service side of the economy. >> does the recent bank weakness, financial service weakness on both sides of the atlantic worry you at all from an economic standpoint? >> you know, i always worry about credit conditions feeding through into the real economy. we are -- if we look at bank lending, so what banks are supposed to be doing, what banks are supposed to be doing, we're seeing expanding. bank loans are expanding. commercial industrial lending is expanding. mortgage loans are expanding. and consumer loans are expanding. what bernanke would have called the core loan growth, loans to
the real economy, are all expanding and on a year over year basis. >> drew, thank you. >> thank you. >> drew matus with a positive, upbeat view on the u.s. economy. we'll be watching that claims number at 8:30 a.m. eastern time. we want to highlight a few things we're watching today. >> walmart, for sure. speaking to drew's point about the consumer. walmart the biggest retailer out there, the biggest private employer out there. how are they going to deal with the current conditions? maybe it's the beginning of a turnaround. >> i'm going to be watching oil. that remains a focus for the market. we have seen gains in oil. continuing to build on those gains today after a 17% rise in the last three days. wti crude higher. the results of our facebook twitter poll, we asked you if political risk around this election should be something to worry about for investors. very interesting. almost 60% of you so far say yes. they're scared of this. 42% say no. keep voting. we have hundreds of votes heading into this election.
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good morning. u.s. stocks on a three-day rally. the s&p a shur500 is now out of correction territory. can the bulls make it four in a row? crude prices rising again after officials in iran voice support for a production cap. analysts are urging caution that this support may not lead to any real action. and the donald falling to second place in a new national poll, but he's firmly in the lead in the next primary state, south carolina. it is thursday, february 18th, 2016, i believe, and "squawk box" begins right now.
live from new york, where business never sleeps, this is "squawk box." >> good morning. welcome to "squawk box" here on cnbc. i'm andrew ross sorkin along with joe kernen back in the saddle. becky has the day off. kayla is filling in. our crew hasn't been all together, but we're happy to see you. >> well, thanks for letting me -- >> no, you've been holding down the fort. >> we had a great vacation. >> together, yes. now we're back. >> neither of you looks tan though. >> you are. >> cold weather? >> i think this was wind burn. i don't know. nonetheless, let's get started. we have lots to talk about. >> so fast down the mountain. >> we were moving. we have to talk about markets. u.s. stocks on their strongest three-day rally since august. check out these three-day gains. the dow and s&p up now more than 5%. the nasdaq gaining 6.3%. this is